Groom, E.L. v Abela, W.C - [1992] FCA 562

Re: ERIC LESLIE GROOM; BETTY LESLIE GROOM and ALAN BERNARD GROOM
And: WILLIAM CHARLES ABELA
No. Q G84 of 1992
FED No. 562
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Neaves(1), Spender(1) and Gummow(1) JJ.

CATCHWORDS

Bankruptcy - Bankruptcy notice - Appeal from dismissal of application to set aside bankruptcy notice on ground that amount of judgment debt overstated - Judgment debt for money due and payable to creditor upon sale of vessel - Payment secured by second mortgage over real property of debtors - Creditor obtaining possession of property pursuant to judicial order - Attempts to sell property unsuccessful - Finding of fact that value of property not sufficient to satisfy first mortgagee and costs of sale - Appeal dismissed.

HEARING

BRISBANE

#DATE 6:8:1992

Counsel for the appellants: Mr R.K. Woodhead

Solicitors for the appellants: Barker Gosling

Counsel for the respondent: Mr J. Sullivan

Solicitors for the respondent: Short Punch and Greatorix

ORDER

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. The appellants pay the respondent's costs of the appeal.

3. In the event that a sequestration order is made against the appellants founded on the bankruptcy notice issued on 24 April 1992, any part of the respondent's costs of the appeal which then remains unpaid is to be treated as if that part were costs of the petitioning creditor.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

On 6 August 1992 the Court dismissed an appeal by Eric Leslie Groom, Betty Leslie Groom and Alan Bernard Groom ("the appellants") from the judgment of a single judge of the Court (Cooper J.) given on 21 May 1992 dismissing an application by the appellants that a bankruptcy notice addressed to them that was issued by a Deputy Registrar in Bankruptcy on 24 April 1992 upon an application made in that behalf by William Charles Abela ("the respondent") be set aside. The Court further ordered that the appellants pay the respondent's costs of the appeal and that, in the event that a sequestration order is made against the appellants founded upon the bankruptcy notice, any part of those costs which then remains unpaid is to be treated as if that part were costs of the petitioning creditor. The Court then said that it would give reasons for judgment at a later date. What follows are those reasons.

The bankruptcy notice required the appellants, within 21 days after the service of the notice upon them, excluding the day of such service, to pay to the respondent the sum of $201,737.70 or to secure the payment of that sum to the satisfaction of this Court or other court exercising federal jurisdiction in bankruptcy or the respondent or to compound that sum to the satisfaction of the respondent. The notice was founded on a final judgment obtained by the respondent against the appellants on 19 July 1990 in a proceeding in the Supreme Court of Queensland…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read Groom, E.L. v Abela, W.C and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [1992] FCA 562
Decision Date: 06 AUGUST 1992

CaseChat Overview and Summary

The appeal in Groom v Abela was brought by the appellants, Groom, E.L. and others, against the respondent, Abela, W.C., regarding the dismissal of an application to set aside a bankruptcy notice. The primary issue at hand was whether the amount of the judgment debt stated in the bankruptcy notice was overstated. The judgment debt pertained to money due and payable to the creditor upon the sale of a vessel. The debtors' real property, secured by a second mortgage, was the subject of a judicial order permitting the creditor to take possession. Despite attempts to sell the property, it did not yield enough to satisfy the first mortgagee and the costs associated with the sale.

The legal issues before the court involved the accuracy of the bankruptcy notice in terms of the amount of the judgment debt and whether the dismissal of the application to set aside the notice was justified. The court had to determine if the bankruptcy notice was correctly issued and if the appellants' application to set it aside was properly dismissed. The appeal was based on the contention that the value of the property in question was insufficient to cover the first mortgage and the costs, potentially rendering the stated debt overvalued.

The court, upon reviewing the evidence and findings, upheld the dismissal of the appellants' application to set aside the bankruptcy notice. The court found that the value of the property was indeed not sufficient to satisfy the first mortgage and the associated costs, but this did not affect the validity of the bankruptcy notice. The appeal was dismissed, and the court ordered that the appellants pay the respondent's costs of the appeal. Furthermore, the court ruled that if a sequestration order were to be made against the appellants based on the bankruptcy notice, any remaining unpaid costs of the appeal would be treated as costs of the petitioning creditor. This ruling adhered to the provisions of Order 36 of the Federal Court Rules concerning settlement and entry of orders.

Orders

Orders of the court

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. The appellants pay the respondent's costs of the appeal.

3. In the event that a sequestration order is made against the appellants founded on the bankruptcy notice issued on 24 April 1992, any part of the respondent's costs of the appeal which then remains unpaid is to be treated as if that part were costs of the petitioning creditor.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.